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Austria RZB has won the mandate to arrange a Eu350m credit for Bundesimmobiliengesellschaft mbH (BIG). Proceeds of the amortising loan are to buy state real estate.

* Republic of Italy Rating: Aa3/AA/AA-

The 27 yen trades announced on Friday were not the biggest the market has seen, but the feeling is that investors are starting to regain their confidence. Three triple-B issuers made deals, including Itochu International's first trade of the year. It was a ¥6 billion ($51.46 million) note that goes out to December this year and pays a final coupon of 0.15%. It was the biggest yen deal of the day, ahead of Banque et Caisse d'Epargne de l'Etat Luxembourg's ¥4.87 billion deal with an almost identical tenor. MMC International Finance (Netherlands) was another triple-B doing business. It announced a ¥500 million trade that matures in January next year and pays 0.4%. The last triple-B was Daiwa Securities SMBC Europe, which announced two ¥500 million trades. They both go out to September 2016, though one has a term that is three days longer than the other, and also has a final coupon of 1.5% as opposed to 2%. The financial repackaged issuers did the biggest volume of business. Though private banks did more than twice the number of trades, 12 compared to five, they also had less than half the value - ¥36.58 million compared to ¥81.09 million. Apollo Spires announced two deals, one for ¥3 billion that goes out to April 2004 and one for ¥800 million that matures in December 2003. Earls did a ¥2.66 billion 12-year trade, and Rosetta went for a 10-year ¥2 billion note. SEALS announced a ¥1 billion seven-and-a-half-year trade. World Bank was the only supranational involved in yen on Friday. It announced a ¥3 billion trade that goes out to October 2031.

Yen trades picked up yesterday and $988.05 billion-worth of deals were closed in the currency off 17 issues. Republic of Italy was largely responsible for the high volumes. It issued a ¥100 billion ($839.42 million) five-year note that will pay a final coupon of 0.375%. The note was issued at a price of 99.936% and was joint-led by JPMorgan and Nomura. The deal will be issued on October 10 2001. International Bank for Reconstruction and Development also saw opportunities in the five-year sector and issued a ¥1.5 billion note that pays interest semi-annually. The note pays a final coupon of 3.5% and will be issued on October 25 2001. At the longer end Kommunekredit issued a 20-year ¥800 million note that pays a final coupon of 4.2%. The trade pays interest semi-annually and will be issued on October 25 2001. Svensk Exportkredit went for two notes at the long-end: a 30-year ¥500 million note that pays a final coupon of 4.5% and a 21-year ¥200 million note that pays a final coupon of 3.5%. At the short-end BMW Coordination Centre issued a one-year ¥2.5 billion transaction that pays a final coupon of 0.11%. The note pays interest semi-annually and will be issued on October 15 2001.

The market has shown signs that volumes are returning to a healthy level in the past few days. But yesterday's announced deals took another dip. Just 45 trades were announced and the yen sector in particular was one quarter lower than on previous days, with just 10 deals closed. SEK gave itself a high profile by issuing three yen notes. One was a ¥300 million ($2.50 million) 25-year trade that pays a final coupon of 4.550%. The other two notes are both for ¥500 million and go out to 2031. Like the US dollar sector, there was no business done in anything under three months in yen. Credit Lyonnais Finance's ¥50 million note goes just long of three months. It is due for settlement on October 10 and will mature on January 15 2002. Konica Finance, the Japanese electronics company did a one-year trade for ¥1 billion. It pays a final coupon of 0.110%. And Voyager, DKB International's SPV, closed a nine-year ¥300 million deal that pays a final coupon of 2.200%/

The yen market is moving along well at the moment. And it was the Austrian issuers who were the busiest yesterday, trading six of the 28 notes that were announced. Erste Bank der Oesterreichischen used JPMorgan for its three transactions, which were for ¥5.13 billion ($43.07 million), ¥5.1 billion and ¥5.09 billion. They each mature in January next year and pay final coupons of 0.5%. Pfandbriefstelle der Oesterreichischen Landes-Hypothekenbank announced a ¥1 billion 20-year note. And Vorarlberger Landes- und Hypothekenbank did two trades. Both were ¥1 billion notes, one with a term of five years, the other a term of 25 years. Salomon Smith Barney was the bookrunner for the latter deal. Salomon also led deals for KfW International Finance, Kommunalbanken, Kommunekredit and Svensk Exportkredit. KfW's was a ¥2.3 billion 30-year deal, and it also did a ¥1 billion 20-year trade. Kommunalbanken went for a ¥500 million note, and Kommunekredit announced a ¥600 million trade. Both go out to October 2021. SEK's note was ¥1.1 billion and matures in October 2011. SEK also did four other trades between ¥300 million and ¥5 billion with tenors ranging from 12 years to 30 years.

Of the 35 yen trades announced yesterday issuers with a rating of less than A3 did only two. Daiwa Securities SMBC Co was responsible for them both. They were a ¥1.2 billion ($10.07 million) 15-year note and a ¥500 million trade with the same tenor. They both have a final coupon of 2%. Triple-As announced 11 trades between them. Exportfinans did a ¥500 million power reverse dual currency note with annual calls. The size has already been increased to ¥600 million however, and there could be further increases depending on how the market performs. A trader at the issuer said they would be very pleased if they could reach ¥1 billion. Nederlandse Waterschapsbank announced a ¥1 billion 20-year deal via Credit Suisse First Boston. The note has a final coupon of 3.5%. And CDC IXIS Capital Markets did four trades. Two were for ¥500 million, one was for ¥800 million and one for ¥1.4 billion. They have respective tenors of 30 years, 10 years, 15 years and 15 years again. Eurofima announced its 13th yen note of the year, with a ¥3 billion 15-year deal. And World Bank went for a ¥1.5 billion trade that matures in March 2028. International Finance Corp opted for a ¥1 billion 30-year trade. Elsewhere, Toshiba International Finance announced a ¥1.7 billion five-month deal, and Svensk Exportkredit did a ¥300 million 30-year trade.

Market report Compiled by Richard Favis, RBC DS Global Markets, Johannesburg

Whether consumer spending is at a high or a low, "everyone has to eat", as the saying goes among bankers. For that reason, supermarket credits have been seen as a defensive sector that offers stability during periods of market volatility or depression. Of course, the sector is not entirely resistant to negative economic data. However, in a depressed economic environment food remains vital, making it one of the last sectors to be affected by reduced consumer spending. As a result, supermarket bond spreads, while generally moving in line with spreads across the market, are less volatile than other sectors and investors appreciate the protection that affords.

Instituto de Credito Oficial has raised the limit off its Euro-CP programme from euro1 billion ($913.84 million) to euro3 billion. Deutsche Bank has also been added as a dealer. The state-owned Spanish bank has 10 notes outstanding off the programme, worth $528.59 million. The Kingdom of Spain guarantees the issuer.

The Republic of Italy this week re-opened the global yen market, issuing a ¥100bn five year transaction via JP Morgan and Nomura to provide the sector with its first sovereign or supranational benchmark since Canada launched a ¥50bn five year bond in March. The deal was priced at 5bp through the JGB 188. According to Kensey Green, head of Nomura's syndicate desk, Italy was an ideal candidate to re-open the market, being the only foreign sovereign issuer that can boast a full liquid yen curve.